UPDC’s Future Looks Superb with Middle Housing, Devt Management, new REITS

Bennett Oghifo

UPDC definitely went through a dry patch in recent years after the whirlwind in the nation’s economy, caused by the 2015 recession, almost blew it out of existence.

However, this leader in Nigeria’s real estate sector is back and with big plans to stay on top of their game. In addition to their upscale housing, hospitality and commercial developments, they will now take the middle property market by storm, without losing their touch of quality. Also new is their property management portfolio to assist people and companies flush with cash design and build, using their expertise. They are also coming with a novel Real Estate Investment Trust (REITS).

UPDC is quite big in the real estate sector, having over N22 billion assets, and it was able to survive the 2015 recession. It got more support with the purchase of 51 per cent of its shares by Custodian Investment Plc. (CIP) in 2020.

The company then had to do all that was necessary to enable it to play in today’s real estate market. “We are here to assure everyone that UPDC is off to a bright start,” said the Managing Director, Mr. Odunayo Ojo, while giving a peep into the future of the company in Lagos, recently. “In 2020, Custodian Investment Plc. (CIP) bought 51% of UPDC from UAC of Nigeria Plc., thereby making UPDC a subsidiary of CIP. In 2021, UPDC launched Pinnock Prime Estate, our flagship development in Lekki Peninsula 2, Lagos.”

The UPDC brand is well-recognised for providing distinctive lifestyle properties across Nigeria and offering exceptional quality property development and facilities management services. The principal activities of the company include development and management of high quality serviced commercial and residential properties.

UPDC has established a development track record consisting of a diverse asset mix in the retail, commercial, residential and hospitality sectors. UPDC was listed on the NSE in 1998, and set up UPDC REIT in 2013, where it initially held a c.62% equity stake. UPDC distributed its stake in UPDC REIT to shareholders in 2020, giving UPDC shareholders direct stake in UPDC REIT Plc. UPDC now holds 5% in UPDC REIT.

UPDC has over 1,000 residential units; 471-room hotel; 30 estates under management; and one large retail mall. It boasts of over 24 years experience developing first class real estate properties in Nigeria. The company, according to the managing director, plans to deliver over 1,500 housing units to the real estate market over the next five years.

Ojo said, “The strengthening of UPDC’s capital structure has positioned the company for profitability. The transaction between UAC of Nigeria Plc (“UAC”) and Custodian Investment Plc (“Custodian”) is complete, with Custodian securing a 51% stake in UPDC and UAC retaining a 43% stake. Impact: UPDC is now operating as a subsidiary of Custodian Investment Plc. and as an associate company to UAC. UPDC exercised the call option on its bond in April 2021. This was financed with the aid of an intercompany loan from Custodian and UAC. Impact: UPDC was able to refinance its debt obligations at a significantly lower cost (16% to 9%). This will lead to a significant reduction in finance cost going forward. Rights Issue Custodian Acquisition Bond Repayment.”

Development Management

He said, “As Development Manager, UPDC will strategically oversee the planning, administration and control of the development during the development life cycle, from business planning to concept development, financial feasibility and overall coordination of the development value chain without financial commitment but for a fee.”

Under the Development Management Mandates, he said, “UPDC has signed Development Management Mandates in Q1 2022 with various companies. UPDC will work hand in hand with the Clients throughout the entire development process, from design approvals to appointment of consultants and contractors. We will be responsible for proactively managing the entire development process, providing comprehensive planning from the pre-development stage to project management to post-development advice, while anticipating and analysing potential risks. We will also be in charge of the evaluation to negotiation on terms and contracts, and from accurate analysis of clients’ demand to strata management and advisory services in regards to investment activities, a development consultancy firm offers a wide range of services. From understanding the Clients requirements to delivering what they look for is our core mission so, we customize our strategies to get optimal results and maximum value of the development. Timely completion of the project along with managing all documents related to development is another one of the crucial aspects we handle and development consultants at UPDC skilfully complete each of these aspects. “UPDC Plc offers an end to end solution, from concept and development to project management of the entire development process,” he said.

Current Developments

Pinnock Prime Estate Pinnock Prime Estate is a 1 .47 hectare site and service scheme located in Lekki Pennisula II right beside the company’s existing Pinnock Beach Estate . “It is

envisioned to become a sought -after development and estate of choice within the area creating a new benchmark for suburban living . The 18 plots will be allocated and priced as follows : High Density Plots – 5 plots ( 5 to 7 dwelling units per plot) Low Density Plots – 3 plots ( 2 dwelling units per plot) Recreational Facilities The estate will be an embodiment of lifestyle consisting of: Pocket parks with a play area, tree lined street and beautiful landscaping.

Infrastructure

Gatehouse, secured access gate and signage FM office Visitors’ Parking Road network and walkways Streetlights, garden and fence lights Industrial borehole and water treatment and storage facility, underground power supply systems, including transformer; Sewage treatment plant system Road drainage systems.

Facility Management

UPDC FM offers world-class facility management services to ensure the Estate remains well maintained, safe and functional throughout its life cycle. The company offers janitorial, security, energy management services and support to residential and commercial properties across Lagos, Abuja, Ibadan and Port Harcourt.

Asset Management

UPDC’s asset management team is skilled in managing the performance of individual investments in the real estate portfolio, as well as identifying areas or opportunities for growth, from performing portfolio and financial analysis to risk management of the assets in the portfolio.

Hotel

UPDC’s 471-room Festival Hotel, located at Festac, is the second largest conference hotel in Lagos.

Key Historic Milestones 

UPDC was carved out as a subsidiary of UAC to manage its portfolio of real estate assets across Nigeria. Listing on the Stock Exchange (1998): UPDC became a public company via a public listing on the Nigerian Stock Exchange (now NGX). UPDC REIT (2013): UPDC became the first real estate development company in Nigeria to establish a large and diversified portfolio of quality assets to successfully list a Real Estate Investment Trust (REIT) on the NSE (now NGX). Today, the UPDC REIT remains the largest REIT in West Africa with UPDC as its Sponsor. UPDC raises capital: UPDC raised capital from its shareholders via a rights issue. Custodian acquires a majority stake in UPDC (2020): Custodian Investment Plc acquired a 51% equity stake in UPDC to empower UPDC as a standalone entity and set the company on a path to profitability. Pinnock Prime Estate: Launch of our flagship development in Lekki Peninsula 2, Lagos. 2001 – 2010 Acquisition of Durbar Hotel (2002): UPDC embarked on the bold acquisition of the 942 room Durbar Hotel in Festac Amuwo-Odofin from the Federal Government. UPDC converted one block of the property into the 471 room Festival Hotel (formerly Golden Tulip,

Festac), and the second block into 196 units of 1 and 2-bedroom apartments now known as The Residences, Festac. 2016 – 2019 Incorporation of UPDC FM (2016): UPDC converted its facility management department into a business subsidiary. The Facility Management Company now delivers its excellent services to both UPDC and non UPDC properties. UPDC raised a bond from the debt capital market (2018): UPDC raised a 5-year, 16% callable bond from the debt capital market.

Recent Corporate Actions

UPDC completed its unbundling of UPDC’s interest in the UPDC Real Estate Investment Trust (“UPDC REIT”) to its shareholders. UPDC however holds a 5% residual stake in the REIT as a sponsor to the REIT Impact: This will help UPDC to direct its focus on its core activities while unlocking additional value for its shareholders by granting them direct ownership in a REIT that has consistently paid dividends since its inception. REIT Unbundling UPDC raised a total of c.N16 billion in 2020 via a rights issue. UPDC’s capital structure has been strengthened following the completion of the rights issue, resulting in a significant reduction in the Company’s debt obligations from c.₦20.8billion to c.₦5.4 billion.

Board of Directors

The Chairman is Mr. Wole Oshin and he has over 30 years experience in the insurance industry. He is the founder and CEO of Custodian Investment Plc.; Odunayo Ojo, Executive Director with over 20 years of experience in the Real Estate industry. He has held leadership roles at Alaro City, Eagle Hills, Abu Dhabi, Ocean and Oil Holdings etc. Fola Aiyesimoju Non-Executive Director Over 18 years investment advisory experience. He is the founder of Themis Capital and the CEO of UAC of Nigeria Plc. Adeniyi Falade Non-Executive Director Over 25 years of experience in the financial industry spanning Investment banking, Risk management, Internal control and Insurance. He has held prior leadership roles at Lead Capital and Ecobank Nigeria Plc.

Oyekunle Osilaja is a non-Executive Director with over 30 years of experience. He has a wealth of experience in the real estate sector and a track record of closing big ticket corporate real estate advisory debt transactions; Folake Kalaro is Company Secretary; Gbenga Olugbami is Financial Controller; Alaba Fagun is MD, UPDC FM; Imelda Ezie is Human Resource Finance and Manager Accounting, Management Information Systems Regulatory Compliance, Litigation and Contracts New Project Development, Appraisal and Marketing Facility Talent Management Management.

Roderick Peck is GM, UPDC Hotel Limited Meetings, Incentives, Conferences and Events; Ilelabayo Akintoye Head, Sales & Marketing. Marketing and Public Relations; Olawale Arigbede is Head, Asset Management Real Estate Financing and Structuring.